BRUSSELS, June 16: Britain rejected on Thursday latest EU proposals to resolve an ugly row over its budget rebate, talking tough at the start of a summit deadlocked on future financing of the bloc. Reiterating London’s stance, Foreign Secretary Jack Straw said: “The rebate is fully justified and if necessary we will use the veto” that Britain has the power to wield over EU financial questions.

“What we have also said is that it is a symptom, only a symptom, of a wider budgetary problem about inequalities in the balance of spending,” he said.

“That remains the case.”

Mr Straw set out Britain’s stance as EU leaders voiced little hope of a breakthrough on the budget talks, which compounded a broader crisis over the EU’s near-dead constitution.

“The proposals from the presidency are not acceptable to us,” Mr Straw said. “That’s one of the reasons why there’s going to be difficulty” during the conclave, he told reporters.

Upping the ante, a British spokesman said it was not essential for the summit to agree the 2007-13 spending plans — leaving open the prospect of it being delayed until after the upcoming British EU presidency.

Britain is refusing to accept a change to its budget rebate — worth 5.3 billion euros (6.4 billion dollars) – without a rethink of EU farm subsidies that gobble up 40 per cent of the entire EU budget.

The rebate, sacrosanct for Britons across the political spectrum, has been in place since 1984 to compensate for the relatively small amount that Britain reaps from the Common Agricultural Policy.

Luxembourg’s prime minister Jean-Claude Juncker has proposed freezing, but not cutting, the rebate, which is projected to average 7.1 billion euros annually between 2007 and 2013.

Any future reductions in the rebate would be tied to a reduction in EU agricultural aid after 2013, according to the Luxembourg proposals.

British officials say a freeze would end up costing London an extra 25 to 30 billion euros over the 2007-13 period, and leave Britain paying one-third more into Brussels coffers in net terms than France, the biggest

As the summit began, a spokesman for British Prime Minister Tony Blair said agreement on the rebate and the spending plans could wait until later, despite the desire of the Luxembourg EU presidency to deal with it now.

“You do not need a deal at this summit,” the spokesman told reporters. “Things can continue. It is therefore up to everybody to assess the advantages and the disadvantages of doing a deal now.”—AFP